A proposal to eliminate the board charged with overseeing for-profit schools in Wisconsin will come before the Legislature's budgeting committee on Friday.
The Joint Finance Committee will vote on a proposal in Gov. Scott Walker's two-year budget that would scrap the Educational Approval Board, which oversees about 250 institutions enrolling about 60,000 students. In the 2013-14 reporting period, the schools received a total of more than $350 million in tuition.
Supporters of the governor's proposal say it would lighten the regulatory and fiscal burden on these institutions. Opponents worry that the changes would remove protections that benefit both students and smaller institutions.
The proposal would likely make Wisconsin the only state without oversight of for-profit colleges at a time when many others are ramping up their level of supervision over colleges that face heavy scrutiny throughout the nation.
"I don't know of any other state that would not have some kind of vetting of for-profit institutions," David Dies, director of the EAB, told the Capital Times in February.
The EAB has overseen for-profit schools since the passage of the G.I. Bill in 1944 — then as the Governor's Educational Advisory Committee. It's been known under its current name since 1968.
Under Walker's plan, complaints against schools would be handled by the Department of Agriculture, Trade and Consumer Protection. Schools that need state authorization in order to receive federal financial aid would go through the Department of Financial Institutions.
Gone would be the EAB's oversight function, which Dies said creates a level playing field — both for students and for the institutions themselves.
The agency handles about 50 complaints per year, Dies said. But were the agency not to exist, he estimates that number would "skyrocket" by as many as 10 to 15 times because "there wouldn't be any rules by which institutions would play."
Walker's proposal would also eliminate a student protection fund, which serves to help students and others affected by abuses by or the sudden closure of a for-profit institution. According to the nonpartisan Legislative Fiscal Bureau, students have received about $383,900 from that fund since August 2014, as a result of the closure of Anthem College in Brookfield.
“The for-profit college industry has earned additional scrutiny with a track record of abuses that have left hardworking students in Wisconsin and across the nation deep in debt and without marketable degrees," said Scot Ross, executive director of the liberal group One Wisconsin Now. “That Gov. Walker would propose gutting state oversight of the predatory practices all too common in this industry suggests he either doesn’t understand the problem or just doesn’t care.”
The range of schools overseen by the EAB includes heavily advertised colleges like University of Phoenix, Globe University, DeVry University and Rasmussen College, along with smaller, owner-operated institutions like taxidermy, welding, massage therapy, yoga instructor and truck driving schools.
The board's budget for the current fiscal year is about $605,000. Its funding comes entirely from fees paid by the schools it oversees. It employs the equivalent of 6.5 full-time positions, all of which would be cut in the budget.
In other words, spread across the schools, for every $1,000 of revenue a particular school receives, it pays the EAB about $1.70.
Because of that, Dies is skeptical of the rationale that the fiscal burden for the institutions is too significant.
Rep. Dianne Hesselbein, D-Middleton, said the proposal breaks something that's not broken.
In a column, she cited letters written to legislators by the heads of some of the institutions the board oversees, who called for the EAB to remain intact.
"EAB assures that all schools provide a similar level of programming and the same level of accountability. This means that we don’t have to lower our standards to compete with schools that cost less and provide little or no actual training. This definitely affects our ability to business in Wisconsin," wrote Jerry Klabacka, president of the Diesel Truck Driving School.
The Joint Finance Committee could make a number of tweaks to Walker's budget proposal — or it could pass it as-is or delete it from the budget entirely.
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